Why Your Solar-Powered Home Is Still Light Years Away

A worker stands near solar panels, manufactured by Sharp Corp., at the SoftBank Yaita Solar Park operated by SB Energy Corp. in Yaita City, Tochigi Prefecture, Japan, on Tuesday, Aug. 20, 2013. The 3 megawatt solar power station is scheduled to start operations from Aug. 23. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images
Tomohiro Ohsumi/Bloomberg via Getty Images
For years, solar power has been long on promise, but short on delivery: Photovoltaic cells -- the building blocks of the panels that you sometimes see on houses -- were available, but the high cost of PV-cell installation and their low efficiency meant that, watt for watt, solar power was much more expensive than that from fossil fuels. For families looking to get off the grid, the economic factor was a big hindrance.

But, as Mother Jones recently reported, that equation is in the process of changing. PV cells are becoming both more efficient and less expensive, a recipe for cheaper electricity. Unfortunately, the "soft" costs -- all the assorted taxes, permitting and installation costs -- have remained fairly steady. Currently, the solar panels and the assorted hardware comprise less than a third of the cost of installation; the rest goes to labor, permits, taxes, overhead, supply chain and assorted other charges.

To get an idea of how much all of these soft costs impact solar usage, it's worth comparing the U.S. to Germany, a country that is widely regarded as the gold standard for solar use. In Germany, PV cells cost almost the same as in the U.S., and hardware costs are about half as much. The big jump, however, comes in soft costs, which are huge in the U.S., making the price of American solar watts nearly three times the price of German ones.

Ultimately, it seems, the biggest barrier for solar energy may not lie in green cells but in red tape.

Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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Too little, too late. Solyndra already took the $500 million and ran.

August 21 2013 at 7:55 PM Report abuse rate up rate down Reply

What???????? 3 years ago I was paid a $20.000 incentive by the state of Florida to put in a $24,000 5 KW system, leaving my costs to be only $4,000. that included permitting and everything. I used German Mage panels that came with a 30 year guarantee, with Enphase microinverters. I have save about $100 a month on my electricity, which means in 4 months, my system will be paid for.

August 21 2013 at 3:34 PM Report abuse rate up rate down Reply

Please pardon my French, but it is "A crying ass shame" that when politics gets its grubby little paws involved, costs seem to skyrocket. Solar panels when eventually perfected offer a considerable relief to voting citizens. However if all kinds of taxes get tossed into the fray then cost of installing the new technology could be out of reach for many perspective buyers.

August 21 2013 at 3:27 PM Report abuse +1 rate up rate down Reply

A light-year is a measurement of distance, not time.

August 21 2013 at 2:13 PM Report abuse +3 rate up rate down Reply

Is anyone familiar with Solar3d?
Is it actually the next gen PV company, or just smoke?

August 21 2013 at 2:09 PM Report abuse rate up rate down Reply

The first rule in any corporation is to limit competition.

August 21 2013 at 1:37 PM Report abuse rate up rate down Reply
1 reply to Ambudz's comment

Like the Chinese?

August 21 2013 at 2:34 PM Report abuse +1 rate up rate down Reply

The utility companies still want you to buy power from them, so some of the advantages will likely be countered by them. The idea of living off the grid is something they don't want. They are building huge solar plants, at least out west here, in order to follow the regulations and laws and have you buy their renewable energy. Still it makes sense to use solar to bring down your utility bills. I guess it depends on where you live.

August 21 2013 at 11:27 AM Report abuse rate up rate down Reply

The Future:

The advancements in passive and active Solar Energy are abundant and currently there are firms working on Solar Roofing Shingles, Solar House Paints, Solar gathering materials, etc., and these products are nearing the production stages, which means vast opportunities for the DIY'ers and the Construction Contractors that will be needed to complete the jobs, or do the entire jobs.

I say complete the jobs, because a DIY'er can do the painting or roofing, but doing the install of the wiring, the plumbing, the control units, the battery backups, the tie-in to the local power company's grid, and the permit and inspections may be too advanced for the average DIY'er at this stage of Solar development.

Foreign Exports:

There are nearly a billion people in the world that do not have access to electricity and these people can be a terrific market for the enterprising USA manufacturer or Solar equipment suppliers. Small portable generators powered by Solar Cell Panels can be exported to countries like Africa, the Middle East, Afghanistan, Pakistan, India, etc., China is already doing this and is 'stealing' the market from the USA, which should not be.

These foreign citizens also need Clean Water and means of desalting water, purifying water, and reusing water. They need means of powering lights, computers, motors, and small vehicles, all of which can be done with light-weight Solar Panels and generators. They need a method of supplying low cost housing that has modern facilities like cooking stoves, hot water, lighting, and refrigeration, all of which can be done with inexpensive Solar and prefab construction that the USA are experts in producing. They need portable medical clinics that can be taken from town to town supplying life saving services, these buildings can be Solar Powered and the EV engines powered by Solar Charged Batteries.

No sun, and night time energy:

Yes, there will be days of no sunlight and we all know that there is no sunlight at night, but that should not eliminate Solar as a power source; we have batteries and other means of storage that can be used, and any good Solar System is 'integrated' into the local or regional power grid and thus, with the use of two or more system sources, one can have power 24/7, and at a cost that is lower than currently being paid.

August 21 2013 at 11:23 AM Report abuse -1 rate up rate down Reply

Solar Fields in the USA
Germany and other countries have banks of Solar Collectors along their highways, we have large Solar Collector fields in the Southwest, and we are looking to build more outside Las Vegas and other southern states.

The neat part about Solar Energy is that it can be constructed locally, installed locally, and therefore, provide profits for local contractors that have taken the time to learn the trade and become the neighborhood's expert in solar, both passive and active.

Passive Solar:

Passive Solar has been with us for thousands of year, it is where we use the sun's heat to warm our buildings, heat our water, and grow our crops. This is done by proper use of materials that absorb heat, materials that can transfer heat, and materials that can store heat. This can be as simple as a pool of water, or a cement block wall painted black. Many of the Passive Solar devices can be purchased reasonably, or made in a person's basement or on site. It is worth looking into and any construction contractor that wants a new path to profits should be looking into this field and offering some of these devices to their past, present, and future customers.

Active Solar:

Active Solar is the use of Solar cell panels that are mounted on rooftops, along streets and railroad right of way, in large desert fields, and on individual poles to provide lighting and communications along highways.

This is a 'big' business in the USA and we in the USA are a leader in Solar Energy production, installation, and use, and the field is growing each day as the price of solar continues to become more affordable. The recent hype about Solar and the few Solar panel manufactures that have had problems is just that, hype. The Department of Energy has for several decades provided low cost loans to hundreds, if not thousands, of Alternative Energy companies and the MAJORITY are doing very well and making PROFITS for their owners and the USA Taxpayers.

August 21 2013 at 11:22 AM Report abuse rate up rate down Reply

Cost of Oil based Fuels
Oil and Gas cost us far, far more than the benefits we receive.

We as taxpayers and consumers are paying nearly $2,000 extra for each vehicle to keep the exhaust pollution in check.

We as air breathers are paying trillions in extra medical insurance and medical fees.

We as water users are paying trillions in cleaning up the acid rain from our water supplies.

We a food eaters of fish and seafood are paying trillions in cleaning up the waters around off-shore wells.

We as park users are paying billions to repair our park and forest lands that are being destroyed by pipelines, oil spills, and general destruction for oil well construction.

We as gasoline users are paying trillions to Wall Street and other speculators that provide nothing to the products.

We the consumers are paying dearly for cleanup of the billions of plastic bottles thrown into our sewers, lakes, rivers, beaches, oceans, and landfills.

We the consumers are paying billions for trash pickup and recycling of which much is plastic.

We the consumers are paying for oil and gasoline damage to our roads and driveways.


August 21 2013 at 11:21 AM Report abuse rate up rate down Reply
1 reply to mac2jr's comment

10-4 Mac, tried to explain this to a fool yesterday. 4.50 a gallon is a tax payer subsidized price for gas. no where near what its true cost should be

August 21 2013 at 12:43 PM Report abuse +1 rate up rate down Reply